Question # 1

Given the saving equation S = - 50 + 0, 20 Y, where s is saving and Y is income.

Choose an answer

The break even level of income is 240

Dissaving takes place if income is 300

Consumption expenditures and saving are equal at an income level of 500

The MPS is constant for all levels of income

In which of the following situations will an increase in the money supply have no effect upon equilibrium income.

Choose an answer

LM is steeply sloped and IS is relatively flat

LM is vertical and IS si steeply sloped

LM is steeply sloped and IS is vertical

LM is relatively flat as is IS

An increase in autonomous net exports

Choose an answer

Shifts IS rightward by k, ox

shifts IS left eard by k, AX

Increase the slope of IS

Decreases the slope of IS

In long run a reduction in labor supply would cause output to __ and the aggregate price level to.

Choose an answer

fall ; rise

fall ; fall

rise ; fall

rise ; rise

Suppose the government provides a tax cut today that is matched by a tax increase in the future that's equal in present value to the tax cut This causes a consumer's saving to.

Choose an answer

Decrease

Increase

Remain unchanged

Increase if the person was a lender and decrease if the person was a borrower

Characteristics of economic laws are

Choose an answer

Mere statement of economic tenduencies

Less certain

Hypothetical

All of the above

A change that increases the real money supply relative to real money demand causes.

Choose an answer

The LM curve to shift down and to the right.

The LM curve to shift up and to the left

The IS curve to shift down and to the left

The IS curve to shift up and to the right.

If the rate of growth of a full employment labor forc eis 1.55 and 2.55 then the celling rate of growth of real GNP, according to Hick's theory of a constrained business cycle,is.

Choose an answer

1.5 %

2.55

4.0%

1.7%

After a temporary beneficial supply shock hits the economy general equilibrium is restored by

Choose an answer

A shift down and to the left of the IS curve

A shift to the left of the FE line

A shift up and to the left to the LM curve

A shift down and to the right of the LM curve

An economics variable that moves in the same direction as aggregate economic activity is called.

Choose an answer

Countercyclical

Procyclical

A cyclical

A leading variable

Under law of demand.

Choose an answer

Price of commodity is an independent variable

Quantity demanded is a dependent variable

Reciprocal relationship is found between price and quantity demandded

All of the above

The short run impact of unanticipated expansionary monetary policy is that.

Choose an answer

Real output decrease

Employment decreases

Real interest rates decrease

Profit margins decrease

The Ad, SRAS ,and LRAS curve each show a relationship between which two economic variables.

Choose an answer

The aggregate price level and output

The aggregate price level and the interest rate

Output and unemployment

Output and the interest rate.

What is the average money balance according to the square root rute if income is Rs.1500, each transaction cost is Rs.4, and the opportunity cost of holding money is.2%

Choose an answer

387

50

175

203

A decrease in the marginal propensity to import will lead to.

Choose an answer

An increase in GNP

Lower the multiplier

An increase in imports

A decrease in imports

Fractional unemployment arises when

Choose an answer

Unskilled or low skilled workers find it difficult to obtain desirable long term jobs

Labor must be reallocated from industries that are shrinking to areas that are growing.

Workers must search for suitable jobs and firms must search for suitable workers.

Output and employment are below full employment levels

The aggregate supply of labor is the

Choose an answer

Total amount of time a person works over his or her lifetime

Total amount of time a person spend in the labor force over his or her life time

Unemployment rate

Sum of the labor supplied by everyone in the economy

The Root Mean square Error for the actual sales and sales forecast for 1985 and 1986 is.

Choose an answer

20.2

19.9

14.7

17.2

The value of real GDP in the current year equals.

Choose an answer

The value of current year output in prices of the base year

The value of current year output in pries of the current year

The value of base year output in prices of the base year

The value of base year output in prices of the current year

Suppose there is full employment and a neoclassical aggregate supply schedule A 105 increases in the nominal money supply.

Choose an answer

Has no effect upon the price level

Increase the rate of interest

Increase the nominal wage 10%

Increase the real money supply 10%

If the economy is in equilibrium at Rs. 180 billion and taxes are reduced by Rs.20 billion, find the new equilibrium given that this is a simple economy i.e. exogenous government spending tax collection and investment spending and a marginal propensity to consume of . .75

Choose an answer

60

200

250

240

More Classes

Other Links

PPSC Economics Chapter 3 Macro Economics MCQs With Answers

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer